On July 29th, 2021, Bill No. 1314 went into effect and brought with it major changes to the City’s Fair Chance Act (FCA) and to how New York City employers must perform their hiring. Among other changes, this bill provides for a two-stage hiring process almost all employers must follow when considering certain criminal information. In addition, these amendments further restrict an employer’s ability to consider certain criminal histories and clarify additional timing and obligations under the Fair Chance Process.

First, Some Background on the New York Fair Chance Act

The original Fair Chance Act went into effect in 2015 at the same time “ban the box” laws were sweeping the country. This original law created a comprehensive but fairly general ban the box act. 

What this law did was essentially forbid New York City employers who employ at least four workers from inquiring about an applicant’s criminal history before making a conditional job offer. The FCA provided a Fair Chance Process that employers would need to complete before they could revoke any conditional job offers. 

If you are an employer of four or more employees, including even a single one working in New York City—with only a few exceptions—this law will cover you. Employees include yourself, part and full-time employees, temporary employees, as well as interns, both paid and unpaid.

The exceptions to this law include positions that are required by either state or federal law to prohibit employment by those with a criminal history. However, even when those state or federal laws supersede the city’s, if those laws allow the employer to utilize their own discretion in evaluating a criminal record, the employer will be covered by the provisions of this law.

These amendments provide an expansive definition of what constitutes an employer.

Under the New York City Administrative Code, Title 8: Chapter 1, an employer includes anyone that has at least four individuals under their employ. This includes all independent contractors that work “in furtherance of an employer’s business enterprise.” This also includes all family members that work for an employer as well.

These amendments also prohibit employers from making any statements or inquiries that relate to criminal history when a person is applying for any position. This language indicates that the FCA protects applicants for employment and independent contractors as well. 

The FCA already extended protections against denying employment due to a lack of good moral character or criminal history without considering Article 23-A factors first. The 2021 amendments to the Act add clarifying definitions establishing precisely when employers are forbidden from taking adverse action, including:

1. When taken due to an employee’s criminal conviction or due to finding that the individual lacks good moral character
2. When taken due to an applicant or employee’s criminal accusation or pending arrest as well as any finding of a lack of moral character as a result of these circumstances

For an employer to take adverse action as a result of these circumstances, they must perform an individualized analysis provided by the Fair Chance Process and Article 23-A. Here an employer must show that there is a direct relationship between the position an individual holds or is applying for and the criminal history of that individual, or they must show that hiring or continuing the employment of the individual would present an unreasonable risk to the public, particular individuals, or property. One important factor to note is that charges adjourned in contemplation of dismissal are not pending unless the status is revoked to return the case to trial.

The most major changes these amendments have made to the employer’s hiring process come down to how they must address criminal and non-criminal history in the hiring process. Specifically, all non-criminal history must be considered, and a conditional offer of employment made before requesting or considering criminal history. This necessitates a major change in how employers must use consumer reports in order to comply with both the FCRA and the amended FCA.

In order to comply, an employer must typically first consider all of the non-criminal information first. This means that when an employer requests a background check from a third party, the provider must separate the report into two halves, one with non-criminal information to consider before making a conditional offer and one to consider after making a conditional offer with any criminal information.

For employers using a service that cannot accommodate this requirement, the employer must have a suitable internal process to separate the criminal and non-criminal information for consideration. This places a significant burden on employers if challenged to prove that criminal information was withheld from individuals involved in making hiring decisions until after a conditional offer is made.

As a result of how recent the new law is, many third-party pre-employment screening providers cannot accommodate providing these reports separately. The New York City Commission on Human Rights suggests it is wise to find a service that can supply this information separately to avoid the risk of liability. 

The amendments to the Fair Chance Act have changed the meaning of conditional offer of employment.  A conditional offer of employment now includes an offer of promotion or transfer as well. Also, for an offer to be a conditional offer of employment, it may only be revoked on the basis of a criminal background check that complies with the Fair Chance Act, a medical exam that is allowed by the Americans with Disabilities Act, or due to information the employer could not have known prior to the offer.

An employer may rescind a conditional job offer on the basis of a criminal background check or motor vehicle report (which often contain criminal information) but only after following the Fair Chance Process. 

Also, if an employer does decide to withdraw their conditional job offer, they need to carefully follow the two-step notification process that is required by the Fair Credit Reporting Act (FCRA).  To follow this two-step notification process, an employer needs to send a pre-adverse action notice to the prospective employee. This notice needs to contain a written copy of the background check and the employer’s Fair Chance Analysis. The employer is also required to give the candidate time to respond to the notice.

According to the previous law, an employer needed to keep a job open for three business days after sending this pre-adverse action notice. However, the current law has extended that time period to five business days.

It’s important that an employer not ask about any arrests that did not lead to convictions, any convictions that were expunged, sealed, or reversed on appeal, any convictions for infractions, violations or petty offenses including disorderly conduct, any cases in which there was a finding in a family court of youthful offender or juvenile delinquency, any convictions which were later withdrawn due to completion of a court program, or adjournments in contemplation of dismissal unless the case was restored for later prosecution. Although, these may be considered if there is an exemption. 

If an employer intends to revoke a conditional offer of employment, the employer is required to analyze the prospective employee’s criminal history before doing so. With the new amendments in place, the employer needs to use two different sets of factors in their analysis.         

If an employer is analyzing an arrest or conviction that took place before employment and is not pending, the employer is to make use of the factors included in the New York Correction Law Section 753, which has been a requirement since 2015.

If an employer is analyzing an arrest that is pending during the application, promotion, or transfer process, then there are a number of other factors that need to be considered. Some of these are listed below.

• The city’s desire to prevent people with criminal justice involvement from being denied licensure and employment
• The seriousness of any offenses
• Ensuring that a potential employer considers the duties and responsibilities of the job before rescinding an employment offer
• Making sure a job offer is not withdrawn unless the prospective employee’s criminal history is relevant to the job
• Considering whether the potential employee was 25 years old or younger at the time of the criminal offense or pending arrest
• The interest of the public agency or private employer in protecting the  property, welfare, or safety of individuals or the general public
• Considering any information the prospective employee provides concerning rehabilitation or any good conduct on the job or in the community

New York City will probably update its forms and notices to include the requirements included in these amendments. However, until they do, employers need to remember that they still need to follow the Fair Chance Act and its amendments. Importantly this includes performing a bifurcated check considering non-criminal and criminal history separately as well as adhering to the adjusted timing (previously 3 days now extended to 5 days) these amendments provide. So, employers should take care to make sure they understand the Act and work with a quality screening provider that can help them comply with the increasingly complex laws concerning background checks. 

For a deeper dive into New York City’s Employment Protection Based on Criminal History and your Frequently Asked Questions answered DOWNLOAD.